It’s official. The commercial real estate lending market has returned to health, or at least is on the cusp of doing so, according to two separate reports, one by SNL Financial, the other by Chandan Economics. Both note that loan delinquencies are reaching post-crisis lows and that lending is increasing at a health clip.
SNL reports that U.S. commercial banks reported a 14-quarter low delinquency rate of 5.28% on commercial real estate loans as of the end of June, and that the ratio of bad CRE loans has more than halved from the peak of 10.76% nine quarters ago. A number of banks, many based in California, have a clean bill of health now in terms of faulty CRE loans. In California, for example, three of the five banks studied had zero delinquent loans. One of these was Santa Barbara, Calif.-based Montecito Bank & Trust and its CRE loan sector accounted for 40% of its portfolio. Based on SNL’s analysis of median CRE delinquency rates Delaware, Iowa, Kansas, Massachusetts, Nebraska and South Dakota are on top of the list with “impeccable asset quality,” it said.
Read more...GlobeSt.com - Reports: CRE Lending Returns to Health - Daily News Article
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